News of the arrest of a nurse alleged to have murdered up to 40 patients during her nightshift was like a siren going off in Hungary. The public shuddered and the newspapers rolled with stories questioning the state of the health service and calling for a reopening of a national debate into euthanasia.

The quiet 24-year-old nurse, who lived with her parents and whose best friend was the family dog, is hardly a typical mass murderer, or even the kind of person who might normally have triggered such a heated discussion.

"She had been viewed suspiciously on a couple of occasions, once when she administered an enema containing cleaning detergent," said one medical orderly at the hospital.

A doctor colleague added: "It's true she had black hair and always wore black, but we thought it was because she had a fairly full figure and wanted to appear slimmer."

Her confession last month to the "mercy killings" of patients in her care at a Budapest hospital, allegedly carried out over a year, has shocked the country - it is unprecedented in Hungary's history. It has also sparked an intense public discussion about euthanasia and the state of the public health care system.

Known simply as Timea F for legal reasons, the young nurse told police she wanted to "ease her terminally ill patients into death" and admitted administering lethal doses of morphine and potassium to them.

She earned the moniker "the black angel" because of her penchant for black clothes and after the deaths of an unusually high number of people on her ward.

"An experienced, professionally trained nurse," was the phrase used to describe Timea by Gabor Takacs, director of the 800-bed Gyula Nyiroe hospital with an annual budget of £5m, where the nurse worked.

But he said she was also "a psychopath who saw herself as the mistress over life and death".

He has prompted an outcry by suggesting the hospital can accept no responsibility for the killings, blaming a dire shortage of nursing staff due to lack of cash in the post-communist health system.

"In the current situation I don't feel that even a small amount of the responsibility lies with doctors," he said. "The nurse in question cared for 40 patients on her own, while this number requires three to four nurses," he said.

The health minister has reacted angrily to the claim. "I simply can't accept that a 24-year-old nurse administered drugs to patients without control," commented Istvan Mikola, who broke off from an EU health ministers' summit in Strasbourg to attend to the crisis. "This is nothing to do with financing and lack of staff," he added.

But in response to what is being viewed as a public relations disaster for an already beleaguered health service, which is having to shut down and merge hospitals all over the country, Mr Mikola has ordered a nationwide review into ward procedures at the country's 162 hospitals.

Critics of the 109-year-old health service say it is not before time. An overhaul of the system between 1994 and 1998 with 35% austerity measures has had, if anything, a retrograde effect on one of Hungary's most neglected public sectors.

Hungarian nurses currently earn a monthly salary of about 28000 Hungarian forints (£67). Many are therefore leaving, some coming to work in Britain's own beleaguered health service. Relatives of patients report that they have to visit the hospital at mealtimes just in order to ensure that their loved ones get fed.

But one of the most controversial issues - a legacy from communist days - is the generous money gifts patients are obliged to give to doctors. "Feketepenz" (black money); "halapenz" (gratitude money); or "paraszolvencia" (pay on the side) - call it what you will, the system does nothing to instil patient confidence in the carer.

A good bedside manner is said to be the ability to smile the so-called "wallet-opening smile". To make matters worse, nurses who would traditionally share in the spoils are being excluded. But as long as wages are low and the system is poorly equipped, the practice of parazolvencia is likely to continue.

Mr Mikola, who has been in office since January, is the first to admit to the sector's problems. But he says that Hungary's situation is not so different from that of other countries. Hungary's health spending, at £245 per capita, "is in the middle range". Germany spends £3,291 a year, while Romania can only afford £42, and Ethiopia is at the bottom with £1.10 a year.

Some of the reform strategies now being looked at include a review of management practices, privatisation, the involvement of large multinationals in funding, as well as a modern database where patients would "log in" with a chip-card system.

Earmarking £945m for this year's budget, Mr Mikola remains optimistic about the government's ability to turn the service round. "The problem is not that the blanket is too short, but that it is being used in the wrong direction," he has said.

The trouble is that nation's unhappy nurses are the ones expected to make the beds.